In a move to strengthen its financial services business, Piramal Enterprises Ltd on Thursday said it acquired 20 per cent stake in financial services firm Shriram Capital Ltd for about $334 million (`2,014 crore).
Shriram Capital is the holding company for the financing businesses of Chennai-based Shriram Group of Companies and controls commercial vehicle financier Shriram Transport Finance Co as well as Shriram City Union Finance Ltd.
“This investment builds our presence in financial services and we see long-term shareholder value creation from our partnership with Shriram Capital,” said Ajay Piramal, Chairman, Piramal Enterprises Ltd.
The holding company has interests in Shriram Life Insurance and General Insurance, retail broking and Shriram City Union, which gives secured and unsecured home and personal loans. The three listed businesses — transport finance, asset management company and City Union — have a combined market capitalisation of `23,601 crore.
It may be noted that in May, 2013, Piramal acquired about 10 per cent stake in Shriram Transport Finance for $304 million from private equity company TPG.
Piramal exited from telecom services firm Vodafone Group last week selling its 11 per cent stake for $1.48 billion. In 2010, it sold its domestic generic drugs business to Abbott Laboratories for $3.8 billion.
R Thyagarajan, founder, Shriram Group said, “Piramal’s entry into Shriram Capital is a significant milestone for the financial services business to take a quantum leap in the group’s contribution to the community at large.”